Myanmar housing market cooled down

Yangon’s property market finally cooled down in 2016 from a peak that began to ease in 2014 as a result of changing government policies.

During 2005 to 2014, high-end condominiums and low-cost apartments sprung up around Yangon and real estate prices skyrocketed in six downtown commercial areas. In the downtown area, the maximum land price reached $1,500 to 2,000 per square foot.

Outside downtown Yangon, land prices also shot up but the construction market began to cool off in late 2014, as people’s spending power declined. In the election year, investors took a wait-and-see attitude toward real estate as they awaited the general election results.

Consequently, apartment sales across Yangon declined 15 to 20 per cent in 2015. In 2016, that trend has worsened, as prices have dropped 25 to 30 per cent on the year and new apartment sales have nearly halted.

Condominium prices have fallen from 200,000 kyat ($147) to 150,000 kyat (110) per square foot in the major areas. Once the new government assumed power, the real estate market hit another speed bump.

In May, the Yangon divisional government implemented new policies for reviewing construction sites, and the government suspended more than 200 high-rise construction projects because they did not meet urban planning standards.

Over the next two months, government inspections brought the construction market to a standstill. Once inspections were completed in July, the 200-plus projects were permitted to continue. But the divisional government ordered that the intended heights of 12 buildings be reduced, that parking facilities be upgraded, and that safety standards be improved.

As a result, affordable housing is still out reach for many. also because the government so far has been unable to entice private investment in low-cost housing, leaving hundreds of thousands of families in Yangon unable to buy even a modest apartment. Instead, many developers have focused on the condominium market, where the profit margins are higher.

Yangon’s property market finally cooled down in 2016 from a peak that began to ease in 2014 as a result of changing government policies.

During 2005 to 2014, high-end condominiums and low-cost apartments sprung up around Yangon and real estate prices skyrocketed in six downtown commercial areas. In the downtown area, the maximum land price reached $1,500 to 2,000 per square foot.

Outside downtown Yangon, land prices also shot up but the construction market began to cool off in late 2014, as people’s spending power declined. In the election year, investors took a wait-and-see attitude toward real estate as they awaited the general election results.

Consequently, apartment sales across Yangon declined 15 to 20 per cent in 2015. In 2016, that trend has worsened, as prices have dropped 25 to 30 per cent on the year and new apartment sales have nearly halted.

Condominium prices have fallen from 200,000 kyat ($147) to 150,000 kyat (110) per square foot in the major areas. Once the new government assumed power, the real estate market hit another speed bump.

In May, the Yangon divisional government implemented new policies for reviewing construction sites, and the government suspended more than 200 high-rise construction projects because they did not meet urban planning standards.

Over the next two months, government inspections brought the construction market to a standstill. Once inspections were completed in July, the 200-plus projects were permitted to continue. But the divisional government ordered that the intended heights of 12 buildings be reduced, that parking facilities be upgraded, and that safety standards be improved.

As a result, affordable housing is still out reach for many. also because the government so far has been unable to entice private investment in low-cost housing, leaving hundreds of thousands of families in Yangon unable to buy even a modest apartment. Instead, many developers have focused on the condominium market, where the profit margins are higher.